- WTI briefly eclipsed the $80 per barrel level for the first time since mid-November as OPEC+ struggles to lift output.
- Crude oil prices have rallied despite recent downside in global equities after hawkish Fed minutes, and are watching Kazakhstan unrest.
Front-month WTI futures have surged on Thursday despite recent hawkish Fed minutes induced downside in other risk assets which oil tends to have a tight correlation to such as US and global equities. Prices momentarily eclipsed $80 per barrel for the first time since mid-November before easing back a little and at current levels in the mid-$79.00s, WTI is trading with gains of about $2.50 on the day. With the last key area of chart resistance in the $79.50 area ahead 2021 highs around $85.00 now cleared, oil bulls may now be expecting WTI to push more decisively into the $80s.
Supply-side rather than demand/macro dynamics have been dictating the price action in crude oil markets on Thursday. Kazakhstan’s 1.6M barrel per day (BPD) producing oil infrastructure is yet to face disruption, but civil unrest there adds further notable downside risk to OPEC+ supply at a time when other members are struggling to meet output quotas. Libya’s National Oil Company (NOC) said on Thursday that oil output currently stands at just over 700K BPD. Libyan output faces severe disruptions as infrastructure undergoes maintenance and repairs – output was as high as 1.3M BPD at the end of last year.
Libya has not been the only country struggling to hit output quotas and a Reuters survey release on Thursday highlighted this dynamic. The survey showed the group’s output only rose by 70K BPD in December, far below the 400K monthly output hike allowed under OPEC+’s agreement. The survey noted that output in Libya and Nigeria fell and that, as a result, OPEC+ net compliance with its output reduction pact rose in December to 127% from 1.20% in November. Concerns about OPEC+ struggles to lift output in line with plans and tightness this exerts upon global oil markets has distracted markets from the news that Saudi Arabia lowered its official selling price for all crude oil grades to Asian customers (an indicator of slowing demand).
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.